There have been many changes affecting the retirement industry in the last few months. First up was the landmark ruling by the Pension Funds Adjudicator, which dealt with the ability to transfer funds prior to retirement age. The other was the implementation of a statement of intent. This has set minimum values to be maintained should a client make contractual changes to his retirement annuity, such as canceling or reducing his premiums or reducing the retirement age.“While the industry may herald this as a great gesture of goodwill,” comments Tony Barrett, head of wealth management, Barnard Jacobs Mellet Private Client Services, “the reality is that, should a member make a contractual change to his RA policy, the cap on fees still allows up to 30% deduction of charges.“While preventing the types of pillage where members saw deductions of up to 70%, charges on traditional RAs are still extremely high and opaque in nature. It is virtually impossible to obtain an accurate breakdown of all the costs and fees that are levied against the investment portfolio,” he says.It is also often difficult to find out the exact nature of the underlying investment portfolio and poor performance is more often than not the legacy that is left with investors. This is particularly true of the so called ‘old generation’ products.“This brings me to the PFA ruling. Many investors who dutifully and, for many years, invested hard earned savings into retirement annuities have become increasingly disillusioned with their investment growth, or lack of it. Up til now investors had been in a ‘Catch 22’ situation where the specific underlying rules of a retirement annuity fund prevented them from switching their investment to an alternate fund manager or institution.“The Adjudicator has ruled that preventing investors from transferring their portfolio was contrary to the rules of the SARAF, the Pensions Fund Act 1956 and the Financial Institutions Act. This pronouncement is most definitely welcome news for all investors who are members of poor performing retirement annuities.“While the traditional retirement industry may have made some minor improvements to long suffering clients, every one percent charged against your retirement fund has a material impact on your nest egg,” he warns.Investors are now able to switch the lump sum in their retirement funds in search of better performance and a far more transparent cost structure.Adds Mr Barrett, “For high net worth individuals who are seeking a retirement product that offers both cost efficiency and transparency of performance, I suggest a personal share portfolio or multi-managed fund through a retirement annuity wrapper. This will ensure they never experience value reductions of 30% should they make their policies paid up. There is often no upfront fee and the annual fees are clearly indicated.”As no fees are recouped upfront, there would be no deduction to the capital value of the fund should an investor choose to cease contributions. His paid up fund would simply be left to grow until retirement age. The investor also has a full understanding of the underlying investments and with the advice of his or her manager can make appropriate changes. The investment can also be tailored to meet the needs of the investor.